actually it's an excellent blu-ray player, compared to other high-end blu-ray players (limitations include; slower loading times, USB storage for Blu-ray content&BD-Live..etc).
PS3 has a better processor then other Blu-ray players. (faster load times)
DVD upscaling is handled better than on the Xbox360.
can output 1080p/24fps. (native movie framerate) if your TV set supports this. (xbox360 doesn't do this, to my knowledge)
upgradable by firmware.
BD-Live is just another hyped feature right now, imo.
It's relatively new so, there's no movie that really uses it well, yet. (only a handful of movies use this feature)
This is just based my own comparisions, done with both Monster HDMI and Component cables (for both the 360 and PS3)
Official Component Cables for the 360, Third-party cables for PS3
On a Samsung 46" 750 Series LCD TV